we built a small craft room into part of the basement. I have my sewing stuff, scrabooking stuff and yarn down there. But honestly, I keep my most current projects upstairs in my office or in the bedroon where I do a lot of the knitting.... and there's a pile of freshly wound yarn in the living room b/c it looks so pretty!
I have tons of shelves in the craft room, and I have a couple rolling carts with plastic bins to try and keep the yarn organized and dust free. I have a high table, but to me it isn't quite big enough to really spread out and work- but it was what was available at the time.
I need to add some sort of flat space for cutting out sewing fabric and laying out patterns, but I'm still working on that.
My daughters toys share some of the shelf space so that her stuff isn't all over the basement..... She loves to be creative so I have an old armoire filled with stuff she can play with- paper, glitter, pipe cleaners, pompoms, glue, paint, play-doh, etc etc...
The floor is some kind of laminate, so messes aren't too hard to clean up. My only issue with the room is that there are no windows, so sometimes the colors end up "wrong" to me. I'm thinking of getting an Ott lite for down there the next time they are on sale.
Anyways- enough rambling, Happy knitting!